09 June 2022
Amazon grows AR shopping tools with Virtual Try-On for Shoes
Augmented reality meets Amazon's scale.
Augmented reality meets Amazon's scale.
Welcome to Near Future. In this weekly feature, The Current spotlights innovations powering the next wave of commerce.
Shopping for shoes on Amazon allows users to scroll through a host of brands, colors and styles. A new tool is adding the capability to use a phone to check out how the shoes look on their feet.
The ecommerce company’s fashion division on Thursday launched Virtual Try-On for Shoes, a new tool that can be accessed in the US and Canada using the Amazon shopping app in iOS (The company said Android will follow soon). After a period in limited release, Amazon is rolling out the feature with thousands of sneaker styles from brands including New Balance, adidas, Reebok, Puma, Superga, Lacoste, Asics and Saucony.
With the introduction of the feature, Amazon is tapping into augmented reality (AR) to mimic an in-store try-on experience. Augmented reality allows users look at a real-world image through a mobile camera, and view an overlay of a digital image within the phone display.
Here’s how Amazon’s Virtual Try-On for Shoes works:
After being popularized by Pokemon Go, brands and retailers have been experimenting with AR in recent years. As we wrote in Augmented reality is transforming the try-on:
It could usher in a new phase of try-before-you-buy. Makeup counters, dressing rooms, shoe try-ons and even mirrors are all key tools used by physical stores that allow shoppers to get a sense of a product before purchase. Augmented reality can help to bring a key part of the in-person shopping experience to the digital realm: "How can I touch it, feel it and get a better sense of this product?" said Will Gee, CEO of Baltimore-based XR development studio Balti Virtual.
Tech enhancements have helped this area to evolve. In 2017, upgrades that came with the iPhone X and Apple’s release of the ARKit marked a major step forward. This opened the way for pioneering apps from Ikea, Wayfair, Warby Parker and Home Depot.
Amazon, too, has introduced AR shopping in the past. It previously rolled out a tool that allowed shoppers to visualize home decor in a room. With L'Oreal, it introduced cosmetics try-on in 2019. In April, Amazon incorporated virtual try-on into a custom clothing service called Made for You that launched in experimental mode.
The new fashion-focused feature comes at a time when AR is increasingly being applied to apparel and beauty, showing how a product will look on a person rather than in a space. Walmart rolled out its own virtual try-on tool for women's fashion after last year's acquisition of Zeekit, though this allows users to choose a model that best represents them rather than see a product on themselves.
Social media platforms are also integrating augmented reality as they look to bring ecommerce capabilities into their apps. After proving out the technology and conversion potential of its AR tools through brand partnerships that included shoe try-on and cosmetics, Snap is in the midst of introducing upgrades that include a central "dressing room" hub within Snapchat for users to view themselves wearing products, and various tools that allow brands and retailers to easily add items and create AR experiences within the app.
AR tools hold promise in helping to drive purchase decisions. According to a study by AR no-code design platform Camera IQ, 59% of consumers said they would be more likely to purchase a product they’ve seen visualized through AR.
Amazon's Virtual Try-on for Shoes. (Gif via Amazon)
Like others before it, Amazon is initially releasing the technology in a targeted way. It is focusing in the single product area of shoes. It's also focused on look, as opposed to combining style and fit like Warby Parker's AR try-on tool for glasses. However, within the experience, the likeness of the shoes appears to fit to a user's feet when rendered within the app.
That said, the ability to view the shoes from multiple angles goes a long way toward providing a more true-to-life experience, and the integration within Amazon's existing in-app shopping experience makes it accessible as part of general browsing.
Plus, the scale of Amazon can still be felt even in what feels like a test. Even as it provides a tool only for sneakers, the platform is providing access to a host of brands, and a wide range of styles and colors.
Try-on is familiar from the in-store experience, but AR combined with Amazon’s product catalog brings the potential for shoppers to try out a wide variety of options, and do so without having to go to a store and pull boxes off the shelves. It’s a representation of how ecommerce can extend the choice available.
“Amazon Fashion’s goal is to create innovative experiences that make shopping for fashion online easier and more delightful for customers,” said Muge Erdirik Dogan, president of Amazon Fashion, in a statement. “We’re excited to introduce Virtual Try-On for Shoes, so customers can try on thousands of styles from brands they know and love at their convenience, wherever they are. We look forward to listening and learning from customer feedback as we continue to enhance the experience and expand to more brands and styles.”
Even as it remains in learning mode, Amazon’s increasing adoption of the technology will likely be felt across ecommerce. An eyewear executive recently told us that AR is becoming "table stakes" for ecommerce shopping experiences, and Amazon including the capability as part of the largest and most widely-used online shopping platform could go a long way toward making that so.
The retailer's marketplace is expanding quickly.
When it comes to ecommerce growth, was the pandemic a blip or a new trendsetter?
As we move further from the height of COVID-related closures, it’s a question that will start to be answered through the lens of history.
So far, the narrative of ecommerce growth in the U.S. from 2019-2022 has gone like this: Ecommerce’s share of overall retail saw a huge spike at the height of the pandemic in 2020-21, when goods in general were in demand and online shopping was necessary to preserve health and safety. Experts looked out and saw a permanent exponential change in the penetration of ecommerce as a share of retail that would last beyond the pandemic. Then, in 2022, everyone went back to stores and the trendline came back to 2019 levels. Growth was no longer exponential. There was still growth, but it was not happening as fast as during the pandemic period.
With this in mind, it’s worth pointing out that 2023 is the first year that there likely won’t be a pandemic-influenced swing to influence ecommerce growth. It is also a year where demand has suffered challenges amid inflation and interest rate hikes.
So as we seek to determine the importance of ecommerce to overall retail, it’s worth it to continue taking a close look at what growth trends retailers are seeing now, whether ecommerce is remaining resilient amid consumer pullback and how retailers are preparing for the future.
The latest example arrived this week from Macy’s. It’s a fitting one for the times. Overall, Macy’s is seeing a slowdown as consumers pull back on discretionary purchases, with sales declining 7% in the first quarter versus the same quarter of 2022. Digital sales were down 8%.
Macy’s is particularly susceptible to the macroeconomic headwinds that many brands and retailers are facing, as spending among the middle-income consumers it counts as a primary customer base is particularly softening, said GlobalData Managing Director Neil Saunders.
But while ecommerce is slowing overall, the importance it gained to Macy’s business during the pandemic is remaining in place.
In 2019, ecommerce made up 25% of Macy’s revenue, CEO Jeff Gennette told analysts on the company’s earnings call. That jumped to a high of 44% in 2020. By 2022, digital reached 33% of sales after the pandemic boom. In the first quarter of 2023, it remained at 33%. So, while the trend line dipped after shoppers returned to stores, ecommerce share still settled in at a higher post-lockdown point than it was before the pandemic.
This came in a quarter in which traffic was “relatively good” across both online and in-store, Macy’s CEO Jeff Gennette said. It was “flattish” online, and slightly up in stores.
“We do expect that this is the reset year with the penetration between them,” Gennette said. “But we do expect more aggressive growth in digital in the future versus stores as we think about '24 and beyond. And that's going to be foisted by a lot of ideas and strategies.
Over the last year, the retailer has made investments in boosting ecommerce, even as shoppers returned to stores. In a bid to boost the assortment of goods available online, Macy’s launched a marketplace in September 2022 that welcomes goods from third-party sellers.
The marketplace had an “outstanding” first quarter, said Macy’s President Tony Spring, who is poised to succeed Gennette as CEO next year. Gross merchandise value increased over 50% when compared to the fourth quarter of 2022, while the average order value and units per order for marketplace customers was 50% above those not shopping at the marketplace.
Macy’s is continuing to build the marketplace even as it racks up sales. The retailer added 450 brands, ending the quarter with 950 brands.
This is helping to draw in new customers, as well as younger existing customers who are buying more items, resulting in increased basket size.
“We're very excited as to how marketplace is really attracting the Gen Z customer, particularly in categories where it was not economically feasible for us to carry in the past,” Gennette said.
In the end, Gennette said a strong digital and social presence is key to attracting younger consumers. That's a different type of shopper than other age groups.
“We know the younger customer starts first online,” Gennette said. That behavior will still be in place as the generation gets older, and gains more buying power in the process.
Going forward, Macy’s is seeking to expand the model to other retail banners in its portfolio. Bloomingdale’s will open a marketplace in the early fall.
The Macy’s ecommerce trajectory isn’t that different from the wider U.S. ecommerce narrative detailed above. With one quarter of 2023 data, there is evidence that ecommerce share settled out at a higher point after the pandemic than where it started before COVID arrived. There is flattening now, but the retailer is taking it not as a sign of a slowdown, or a signal to change course. Rather, it sees changing consumer behavior as a reason to build for the future.